The Importance of Retirement Planning

by David Jenyns on May 22, 2009

Stocks and bonds are a good long-term investment that should be integrated into the savvy investor’s retirement savings plan.

United States Savings Bonds, for example, may be bought regularly by pay-roll deduction. Still another alternative is to exchange them for government bonds, which will provide regular interest payments semiannually.

This means that our citizen of 50 may embark upon a program of regular purchase of these bonds with the expectation that those bought in the beginning may be left undisturbed until the retirement date approaches. We often hear the stated objection that such bonds do not guard against inflation.

Carefully selected and regularly bought stocks and bonds may also provide supplementary retirement income, but care in selection must be employed in order to provide protection for invested capital coupled with a reasonable rate of return. Long-term capital gains, while a desirable objective, are no longer paramount and must be considered entirely incidental.

Bonds should be carefully selected so as to provide adequate protection plus a suitable return. High-grade preferred stocks may also be considered although the same money is better placed in bonds.

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